Behavioral Targeting Study Reveals CPM Lift

  |  August 17, 2004   |  Comments

Through an examination of three studies, Advertising.com found using even a small portion of behaviorally targeted ads yields big results.

Researchers at AOL's Advertising.com found a definitive link between behaviorally targeted online ads and click-through (CTR) and conversion rates. The study, comprising 500 million impressions, examined three separate ad campaigns with the results indicating that users were most responsive to ads that drew upon their online behavior. The company declined to divulge specifics about the advertisers or their business categories.

The study employed Advertising.com's LeadBack behavioral marketing technology that identified anonymous user behavior on advertisers' Web sites. Using this system, Advertising.com was able to identify users that did not complete advertisers' registration forms or make purchases. These behavioral observations allowed Advertising.com to serve customized ads to these users as they visited other sites across the network.

"For each campaign approximately 5 to 10 percent of the impressions employed behavioral targeting," said Lauren Weinberg, research manager, Advertising.com.

The goal of Advertiser A's campaign was to drive visitors to the advertiser's Web site to complete a registration form. Through 360 million impressions, Advertiser A experienced a 192 percent improvement in CTR, and a 167 percent improvement in conversion rate. In addition to achieving the desired results, Advertiser A improved the effective cost-per-thousand (CPM) rate by 167 percent.

Advertiser B's campaign was directly related to revenue generation, as the goal was to create sales via valid credit card. Over a two-week time period, 21 million impressions were served, resulting in 2,232 percent improvement in conversion rates for behaviorally targeted ads, and a 94 percent lift in CTR compared to non-targeted impressions.

Average Non-Targeted Vs. Targeted CPM Rates
Advertiser Non-Targeted
Impressions
Targeted
Impressions
Advertiser A $1.49 $3.98
Advertiser B $0.55 $3.44
Source: Advertising.com

Weinberg explained, "...a higher effective CPM rate indicates that each impression is more valuable because we're able to reach the advertiser's ideal consumer segment with fewer impressions.

Advertiser C's campaign of 140 million impressions was designed to help the company acquire new customers. With a portion of behaviorally targeted customized creatives that drove visitors back to the site, Advertiser C experienced an improvement of 225 percent in CTR over non-targeted ads. Furthermore, conversion rates for behaviorally targeted impressions were increased 3,130 percent over non-targeted, and the effective CPM rate improved 2,978 percent.

"Every impression using behavioral targeting was worth more because more revenue came in for each impression. The key takeaway point is really that behavioral targeting eliminates wasted impressions," said Weinberg.

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